19363
Why petrol cars may win race against diesel vehicles
Posted on 07 Jan 201341,147 Views4 Comments
With diesel prices likely to go north coupled with higher price tags of diesel vehicles the market may tip in favour of petrol cars
When did the switch happen?
The share of petrol cars, which constituted 81% of the overall market in FY08, has been slipping consistently year-on-year due to the introduction of quality diesel hatchbacks and sedans in the market.
The drop, however, has been dramatic in the past couple of years, with petrol prices getting deregulated and diesel prices still controlled. The price gap between petrol and diesel fuel which was around Rs 9.80 in May 2010 widened to Rs 25 in a short span of a year. This resulted in a major shift in demand for diesel cars.
The share of petrol cars, which stood at 75% in FY10, slipped to 69% in FY11 and further to 58% at the end of FY12. It went further down to 47% in July 2012 before it gradually recovered. The share of cars has seen a gradual increase month-on-month to 54% by October of 2012, before closing out the month of November at 53%.
After a knee-jerk reaction from many customers towards diesel cars, many automotive companies imparted intensive training to their sales personnel and dealers. Carmakers such as Maruti Suzuki, Hyundai India and Toyota Kirloskar developed tools to define the cost of ownership at the dealership.
Toyota Kirloskar even reached out to professionals like teachers, doctors, lawyers and employees of the PSU sector who by virtue of their vocation need not travel a lot and, hence, are not likely to run their vehicles beyond 1,500 kms a month. However, if the usage is higher than that, despite the diesel price increase, the diesel cars will still be more economical.
With a proposed increase in diesel prices, a return to petrol cars is a given, say experts. Already, Toyota Kirloskar has seen a 5% shift towards petrol cars post the diesel hike and ditto is the case for General Motors. The Chevrolet Beat petrol contributed 15% of the overall model's sales before September. As on December it contributed 20%.
Sandeep Singh, DMD & COO (sales, marketing, customer service and commercial divisions) Toyota Kirloskar says the industry has seen a shift in demand from diesel to petrol cars in the entry level segment after the diesel price hike in September.
"An array of factors are responsible: The customer's realisation of the advantages of owning a petrol car over a diesel one, the government's prior announcement of its plans to increase diesel prices and, finally, carmakers like Toyota, who have maintained a steady price gap between their petrol and diesel vehicles."
Singh expects the petrol contribution in Etios Reva and Corolla Altis to move up to 25% in the next quarter and the company is already planning its production accordingly.
Hyundai India, which saw its petrol car share fall to 64% in June, has seen a revival in demand for petrol cars, with 82% of its overall sales coming from them. However, Maruti Suzuki's petrol car sales remained at 60% for the most part of the year due to a diesel engine capacity constraint.
Do you like this story?
- Previous Story
- Next Story
Readers' opinions ( 4 )
Post a Comment
Post a Comment-
abhilash
everybody starts with comparing the petrol and diesel variant of the same model say swift petrol and swift diesel. . .What if i've 6.5 lacs ,which car should i buy in terms of best value for money?
-
Pranav
Replying to above post-One more thing that went unnoticed is that once a car has completed 90k or 100k - (by god's grace
-
anant
One major factor which you forget is the resale value of a Diesel car even after 5yrs..You jus have to go to nearest 2nd hand car show room to get to know of reality..You will find difference of atleast a 1 to 1.5lakhs between 2nd hand petrol and diesel variants..which will almost be the difference you are paying while buying the car. Runnng costs are almost half and with modern disiel cars there is not much difference in terms of maintenance either. I would say 10K kms per yr is good enough reason to go for a diesel car
-
Prabhakar
i dont agee with anant. the extra cost you pay for diesel; let say 1 lacs rupees. With this 1 lac rupees, you can put another 5000 literes of petrol.What happens if u have taken a car in EMI? The interest portion also will come for that 1 lac extra amount in diesel.
Diesel price hiked by 45 paise
The government has hiked diesel price by 45 paise...
Auto industry welcomes move to hike diesel price
by IANS
SIAM supports the government's proposal to...
Demand for diesel cars slows down
by TNN Photography: Kunal Khadse
The rush for diesel cars in the Indian market is...
The Ferrari Way : Special Coverage
Ferrari has been voted as the most powerful brand in the world according to Brand Finance and the...
Chevrolet Enjoy : Special Coverage
Designed to take on everything from the Maruti Suzuki Ertiga to the Toyota Innova the Enjoy is...
